How High-performance Outliers Affect Entrepreneurial Entry on Crowdfunding Platforms

34 Pages Posted: 9 Apr 2014 Last revised: 10 Nov 2023

See all articles by Anil R Doshi

Anil R Doshi

University College London - School of Management

Date Written: September 24, 2023

Abstract

Entrepreneurs are increasingly choosing to enter digital crowdfunding platforms as one of the first steps toward establishing new ventures. In this paper, I study how that decision is affected by the presence of high-performance outliers—that is prior projects that raised substantial amounts of capital. I look at the early period of rewards-based crowdfunding, where there were two predominant platforms, Kickstarter and Indiegogo. I find that regardless of which platform an outlier appears on, subsequent entry is relatively higher on Indiegogo. This relative increase is stronger for low-quality entrepreneurs. The results suggest that the impact of high-performance outliers depends on the differentiated features of the two platforms. I discuss implications for understanding entrepreneurial entry and crowdfunding platform competition and governance.

Keywords: platforms, two-sided markets, crowdfunding, entry

Suggested Citation

Doshi, Anil Rajnikant, How High-performance Outliers Affect Entrepreneurial Entry on Crowdfunding Platforms (September 24, 2023). Available at SSRN: https://ssrn.com/abstract=2422111 or http://dx.doi.org/10.2139/ssrn.2422111

Anil Rajnikant Doshi (Contact Author)

University College London - School of Management ( email )

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HOME PAGE: http://mgmt.ucl.ac.uk/

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